Kibbutzim inject some $30 million into local startups

Investments are part of the push made by the collective communities to take a bite of Israel’s booming tech scene

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

Kibbutz members harvesting grain at Ein Harod, 1938 (Kluger Zoltan/GPO)
Kibbutz members harvesting grain at Ein Harod, 1938 (Kluger Zoltan/GPO)

Israel’s kibbutzim, the collective communities that were set up at the start of the 20th century and typically dealt in agriculture, have boosted their investments in local startups by 45%, the Kibbutz Association said.

Investments in Israeli startups totaled NIS 110 million (some $30 million) in 2018, in a total of 34 deals. The investments were made via the Hamashtela fund, dedicated at boosting technology and innovation in the kibbutzim, the association said in a statement.

The kibbutz manufacturing enterprises are also investing increased sums to bring innovation into their plants, the statement said. Sales from kibbutz enterprises totaled almost NIS 45 billion and employ over 30,000 members and external workers, the statement said.

Claiming to be Israel’s first startup ventures, the kibbutzim are setting their sights on new technologies. Alongside agriculture and industry, in the past few years they are seeking to develop a third “pillar” – that of technology, to help boost economic welfare.

After playing a key role in founding the nation, the kibbutzim slid into social and economic malaise during a financial crisis that gripped the country in the 1980s. Disillusioned by the apparent failure of the economic cooperative model, many young members left for the cities, leading to concerns about the demise of the entire venture.

The kibbutzim have since made a comeback by shifting away from their socialist roots — setting up local industrial ventures, embracing differential salaries and undergoing some sort of privatization that allows members to work off the kibbutz and non-members to work on the premises.

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